‘Referencing protects tenants as well as landlords’

A "basic check" reference will provide landlords with "basic" information to verify that the tenant is who they say they are and to highlight any background information about the tenant’s history; for example, 6.4% of tenants that Total Landlord Insurance referenced in September were found to have one or more CCJs recorded at an undisclosed address.

However, more alarming figures, only available from analysis of "full referencing checks" from the first half of 2012, found that 23% of self-employed applicants were unable to provide tax returns or acceptable proof of income and 51 applicants had provided false employment details.

"More comprehensive checks will not only reveal this information but also obtain previous landlord and letting agent references where available," said Eddie Hooker, CEO of Total Landlord Insurance.

According to Credit Check, the Citizens Advice Bureau in England and Wales dealt with 8500 new debt problems every working day during he year ending June 2012.

Total Landlord Insurance said it believed landlords should undertake more scrupulous checking of their tenants to protect their investment and income streams.

Hooker said: "In much the same way mortgage lenders have become more stringent with their lending to ensure borrowers are able to meet repayments, landlords should act in a similar fashion to ensure that the tenant can meet their obligations. High unemployment and stagnant wages are making conditions particularly tough on those having to rent with rent in many areas at peak levels, but it makes no business sense for a landlord to rely on an income from someone who is not financially stable."